Will India Become the New “China” for the Dry Bulk Market? – Hellenic Shipping News Worldwide

in Dry Bulk Market,Hellenic Shipping News 24/10/2023
Source: Intermodal
According to Mr. Yiannis Parganas, Head of the Research Department, “India is actively pursuing the development of 65.3 GW of coal power capacity. Within this capacity, 30.4 GW is currently under construction, while 35 GW is in various pre-construction stages, including 14.4 GW that has received permits, 11.8 GW that is in pre-permitted stages, and 8.8 GW that has been announced. Notably, 3.9 GW received permission in the first five months of 2023, a substantial increase from zero in 2022”.

The shipbroker added that “the critical question at hand is whether India genuinely requires all this additional power capacity. In August, the country experienced a record-breaking energy consumption, reaching 152 billion kWh, with a significant portion of the additional generation stemming from coal-fired units, contributing an additional 16 billion kWh. Despite a slight decline in energy consumption in September (-7.8% month-on-month) due to rainfall, it remained higher than the same month the previous year. The increased energy demand, particularly in the hot month of August, was met with improved fuel availability, preventing severe power shortages and blackouts. This improvement was driven by an increase in both domestic coal production, which saw an 11% rise in the first eight months of 2023 compared to the same period the previous year, and a surge in seaborne demand. Notably, a total of 145 million tonnes of coal was imported in the first eight months of 2023, marking a 3% increase from the same period in 2022. Furthermore, it’s worth mentioning that South African coal is once again finding its way to Indian consumers, following a period of European demand from the same supplier last year, prompted by EU sanctions on Russian coal”.
Source: Intermodal
“However, when we look at the long-term perspective, the landscape undergoes a significant shift. According to the National Electricity Plan’s (NEP) ten-year coal projections, there is no requirement for new coal projects to enter the pre-construction phase. Even if all the coal capacity in the pre-construction stages were to become operational, and the projected retirement of 2.1 GW was to occur as per the NEP’s estimates, the installed on-grid coal capacity would reach 275 GW. This figure far exceeds the NEP’s projected need of 259.6 GW in the fiscal year 2032, according to the base case scenario. In simpler terms, there is no necessity for an increase in proposed coal capacity; instead, there is a need for a reduction. It is evident that for India, which generates approximately 70% of its electricity through thermal power plants, coal will continue to play a crucial role in supporting its electricity generation in the near future. This is due to coal’s proximity to ensuring energy security and its cost-effectiveness. Looking further into the distant future, the situation becomes less clear concerning the phasing out of coal. Recent history has shown that when circumstances demand it, factors such as energy security and costs can take precedence over climate policies”, Mr. Parganas concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide
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